New York City real estate moved slowly in 2023—and 2024 isn’t shaping up to be better

Mortgage rates that peaked at 8% in October, the war in Ukraine, and the Hamas attack on Israel increased volatility in Big Apple real estate, according to the report released Wednesday from Coldwell Banker Warburg, a real estate office of Coldwell Banker.

Despite signals of “urban health” in 2023—like busy restaurants, concert halls, and theaters—the city’s residential real estate had a weak year in some respects, Frederick Warburg Peters, president emeritus of Coldwell Banker Warburg, wrote in the report. Big-ticket items including large co-ops, townhomes, and condos took more time to sell.

New York City real estate is moving counterintuitively

Many properties in the $5 million to $10 million price range took four to six months to find a buyer, according to data from real estate analytics company UrbanDigs that was used in the report. Even less expensive one- and two-bedroom properties sat on the market for months, Peters added. New York City homes historically take about three months to sell, according to an October 2023 report from real estate search engine StreetEasy.  

At the same time, the cost of a median-priced home in New York City rose 7.6% to $839,000 as of November 2023, according to Realtor.com. Limited supply and high demand are the driving factors for rising prices. 

Although higher home prices are good for sellers, it’s keeping new buyers out of the market. Inventory sitting on the market for longer also signals that homes are priced too high to begin with—meaning that high prices are affecting both buyers and sellers.

“All sellers believe their property is worth more than they believe other comparable property is worth. That’s just human nature,” Peters says. “Pricing aspirationally doesn’t serve sellers in this market.” 

The rental market in the Big Apple also got tighter and more expensive in 2023, which Peters calls “an interesting phenomenon” because an expensive and tight rental market usually drives people to buy, he says. But not last year, when high mortgage rates discouraged first-time homebuyers and buyers of lower-priced homes.

The complicated market conditions left many buyers “caught between a rock and a hard place,” Peters says. “Financing is extremely expensive, but the rental market is also extremely expensive. It’s a tough moment to enter the marketplace in the city.”

Peters explains that this phenomenon largely stems from a supply and demand issue. After the world opened up following the pandemic, people were unsure about purchasing a home, and instead took advantage of lowered rental prices, he says. But now because of rent control, the city’s landlords are limited in how much they can raise rent, and many people, therefore, are…